Taiwan Semiconductor: Buy Before Earnings (Rating Upgrade)

Summary:

  • Taiwan Semiconductor has shown strong trend performances, with a 25.5% return, outpacing the S&P 500’s 8.84% gain, and is nearing long-term highs.
  • TSMC’s Q2 earnings exceeded expectations, with 36.3% net income growth and 40.1% revenue growth, driven by demand for 5nm and 3nm products.
  • Despite potential risks from elevated price-sales valuations, TSMC’s forward PE ratio is attractive compared to peers, justifying a “strong buy” rating.
  • Indicators suggest TSMC has room to extend higher, with support from AI and mobile phone demand, and potential for new all-time highs.

Electronic technician holding tweezers and assemblin a circuit board

shih-wei

When I last covered Taiwan Semiconductor Manufacturing Company (NYSE:TSM) on May 13th, 2024 with “Taiwan Semiconductor: Breaking Major Upside Levels”, the stock was in the process of breaking through major resistance levels (located at $148.43) that were formed


Analyst’s Disclosure: I/we have a beneficial long position in the shares of TSM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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